The development of the Internet has created new online markets and marketplaces. For example, a user (e.g., a consumer) with an Internet connection can search for a variety of items (including, for example, physical products, services, digital media or content, and the like) provided by online merchants. Users can typically pay for items using a number of different online payment processing options. One common online payment processing option includes payment through credit cards. In a typical credit card payment purchasing scheme, a user accesses a website (e.g., of a merchant or other provider of items) and provides required personal information and a credit card number. The merchant submits a charge to a corresponding credit card company, and completes the online payment purchase with the user once the credit card company authorizes the charge. Online merchants, however, are exposed to high costs associated with fraud and charge back fees, and bear liability because typically no credit card signature is required when a user pays online using a credit card.
Another online payment processing option includes payment using electronic checks (referred to herein also as e-checks) through a funds transfer system associated with the Automated Clearing House (ACH) network. The ACH network is an electronic funds transfer system governed by NACHA (National Automated Clearing House Association) which sets operating rules that provide for inter-bank clearing of electronic payments for participating depository financial institutions. However, as with the credit card payment purchasing scheme, payments made using e-checks through a funds transfer system associated with the ACH network can be charged back or reversed long after a transaction date. In addition, not all financial institutions (including banks) participate in the ACH network. Other conventional e-check payment systems typically require merchants (or other check processors) to buy special check printing equipment and proprietary checks, so that the merchants can print out and then deposit physical paper copies of the consumer check. Merchants, however, must typically wait a long period of time (e.g., 5-7 days) for a printed check to clear.
Accordingly, what is needed is an improved online consumer payment solution. The present invention addresses such a need.